1. The Field of the Invention
The present invention relates to systems and methods for approving and paying health care insurance claims promptly. More particularly, the present invention relates to systems and methods for promptly paying health care providers for services rendered before the health care insurance claims can be processed and, if necessary, adjudicated by an associated carrier or payer.
2. Relevant Technology
The cost of health care continues to increase as the health care industry becomes more complex, specialized, and sophisticated. The proportion of the gross domestic product that is accounted for by health care is expected to gradually increase over the coming years as the population ages and new medical procedures become available. Over the years, the delivery of health care services has shifted from individual physicians to large managed health maintenance organizations. This shift reflects the growing number of medical, dental, and pharmaceutical specialists in a complex variety of health care options and programs. This complexity and specialization has created large administrative systems that coordinate the delivery of health care between health care providers, administrators, patients, payers, and carriers. Although beneficial in some respects, the administrative system has increased the overall cost of health care while, at the same time, making it difficult for health care providers to receive advance payment for services rendered.
There are several reasons to account for the detrimental effect that large administrative systems have had on the advance payment of claims for health care services. For example, a single health management organization may review tens of thousands of payment requests each day and tens of millions of requests a year. The sheer volume of payment requests alone creates a backlog of unpaid claims. Additionally, the contractual obligations between parties are complex and may change frequently. Often, there are many different contractual arrangements between patients, payers or carriers, and health care providers. The amount that is authorized for payment may vary by the service or procedure, by the particular contractual arrangement with each health care provider, by the contractual arrangements between the carrier or payer and the patient regarding the allocation of payment for treatment, and by what is considered consistent with current medical practice. As a result of any changes in these contractual relationships, it is often necessary to spend additional time reviewing and analyzing claims, further delaying the payment for services rendered. This is particularly true when claims are submitted with clerical errors, in which case the claim will be disputed and may ultimately have to be resubmitted.
When a claim is disputed, it must be adjudicated to determine exactly which services are authorized and how much a health care provider will be paid. Adjudicating a claim can take several weeks or months and may require multiple submissions of the same claim. While a claim is being adjudicated, a health care provider is left without funds for services that have already been rendered, and as a result, the health care provider may suffer serious financial problems that are associated with cash flow realities.
During recent years, there has been an attempt to expedite the payment of health care services by automating the process for creating, reviewing, and adjudicating payment requests. For example, there currently exist claims processing systems whereby technicians at health care providers' offices electronically create and submit medical insurance claims to a central processing system. The technicians input information identifying the physician, patient, medical service, carrier or payer, and other data with the medical insurance claim. The central processing system verifies that the physician, patient, and carrier or payer are participants in the claims processing systems. If so, the central processing system converts the medical insurance claim into the appropriate format of the specified carrier or payer, and the claim is then forwarded to the carrier or payer. Upon adjudication and approval of the insurance claims, the carrier or payer initiates a check to the provider. In effect, such systems bypass the use of the mail for delivery of insurance claims and save overall time.
However, even using these automated systems, medical technicians at the health care provider's office are often unable to determine whether the claim, as it is submitted, is in condition for payment. If the claim is not in condition for payment then the claim will undergo a protracted adjudication, which may include multiple resubmissions of the same claim. For example, it has been found that a large number of insurance claims are submitted with information that is incomplete, incorrect, or that describes diagnoses and treatments that are not eligible for payment. Accordingly, these claims may be rejected for any of a large number of informalities, including clerical errors, patient ineligibility, indicia of fraud, etc. The health care provider, however, is not made aware of the deficiencies of the submitted claims until a later date, potentially weeks afterwards, when the disposition of the insurance claim is communicated to the health care provider. As a result, many claims are subject to multiple submission and adjudication cycles, as they are successively created, rejected, and amended. Each cycle may take several weeks or more. The resulting duplication of effort decreases the efficiency of the health care system and increases the time it takes to process a claim.
Studies have shown that some insurance claim submission systems reject up to 70% of claims on their first submission for including inaccurate or incorrect information or for other reasons. Many of the claims are eventually paid, but only after they have been revised in response to an initial rejection. Thus, while systems that permit electronic submission of insurance claims marginally decrease the time needed to receive payment by eliminating one or more days otherwise required to deliver claims by mail, they remain subject to many of the problems associated with conventional claims submission systems. Accordingly, even automated systems that are designed to improve the efficiency of the health management systems have ultimately failed to provide an adequate means for promptly paying health care providers for services rendered.
Some health care providers cannot afford the luxury of waiting an extended period of time for claims to be processed because of financial obligations related to operating expenses and overhead. This is particularly true for health care providers who purchase new equipment and hire experienced staff. Any delay in receiving payment can create cash flow problems. Accordingly, in order to attempt to minimize the number of claims that are rejected and effectively reduce the overall amount of time it will take to get paid, physicians or their staff have had to spend inordinate amounts of time investigating which treatments will be covered by various insurance carriers and insurance plans. Normally, such activity involves calling insurance carriers over the telephone. The time spent in such activities, however, increases overhead costs and represents further efficiency losses in the health care system. One consequence of the inefficient and lengthy claims processing system is that some health care providers are deterred from purchasing new equipment and hiring experienced, high-salary, staff because of cash flow constraints.
One way to improve cash flow is to require payment for services at the time of service. This, however, may be prohibitive, depending upon the cost of the health care services provided and the ability of a patient to pay. Moreover, many patients are not willing to pay for health care services at the time they are rendered because they are either covered by insurance or they believe they are covered by insurance. Depending on a patient's insurance plan and the diagnosis and treatment rendered, however, the patient may be required to make a co-payment representing, for example, a certain percentage of the medical bill or a fixed dollar amount. Because of the large number of insurance carriers and insurance plans, however, the amount of the co-payment can vary from patient to patient and from visit to visit. In fact, some insurance plans do not require the patient to make a co-payment at all, in which case the health care provider must wait for the insurance claim to be processed and adjudicated. Accordingly, the various insurance plans make it difficult to know exactly how much co-payment each patient is required to make. This is particularly true when coverage of an insurance plan is based on percentages of total services and not on flat co-payment amounts. The uncertainty regarding co-payments makes it even more difficult for health care providers to receive advance payment for services rendered, particularly for the patient's portion of costs pertaining to the health care services. Furthermore, once the patient leaves the office, the expense of collecting amounts owed by the patient increases and the likelihood of getting paid decreases.
In view of the foregoing, there is a need in the art for providing health care providers with advance payment for services rendered. For example, it would be an advancement in the art to provide a claims payment system that would enable health care providers to receive payment for services rendered prior to the completion of a conventional claims adjudication process, particularly when the adjudication process is protracted due to claim informalities and administrative inefficiencies. It would also be an advancement in the art to provide a claims payment system that would enable health care providers to know exactly how much co-payment to request from a patient prior to discharging the patient.